The U.S. oil industry should treat carefully those who have looked environmental overreach in the eye and blinked.
Twenty-eight counties in Pennsylvania have decided they don't want reformulated gasoline. Complying with federal air quality standards for ozone, they never needed reformulated fuel. Like many places in the eastern U.S., they once thought it wise to make use of Clean Air Act provisions allowing them to "opt in" to the program.
EFFECT OF COSTS
Then costs appeared on the horizon. Reformulated gasoline costs more to make than conventional fuel does, which is why refiners didn't make it until required to do so. Now refiners must try to recover the new costs at the pump.
So erstwhile opt-ins are becoming last-minute opt-outs. Counties in New Jersey, New York, and others in Pennsylvania are thinking about joining the trend. Why make residents pay extra for extra-clean gasoline where air quality isn't a problem?
It's a welcome outbreak of common sense in environmental matters. But it puts refiners and marketers in a terrible fix. In anticipation of the new-year start of the reformulated fuels requirement, companies this year drained tanks of conventional gasoline, began making reformulated fuel, and compartmentalized distribution systems in line with new regulatory and chemical complexities.
Money spent on these measures gives refiners good reason to tell the opt-outs that it's too late, that they made their decision, that there's no turning back the clock. But that would be a mistake.
Common sense in environmental matters is rare and must be accommodated whenever and wherever it becomes manifest in official policy. This might represent the start of a healthy backlash against the Clean Air Act, especially the amendments of 1990. The legislation armed a series of economic time bombs, the largest of which are only now beginning to explode. Motorists aren't happy with prices of reformulated gasoline. They'll be altogether ornery after a few have bought repairs for cars and trucks that.flunk new emissions tests.
It all might lead Congress and the Environmental Protection Agency to reconsider the Clean Air Act and its regulations. This in turn might give industry a chance to smooth some of the roughest spots - continuing optin perplexities, for example, or the regulatory mandate for ethanol.
As it has throughout the development of reformulated fuels laws and regulations, the industry must support the effort to improve the environmental performance of its products while resisting unnecessary requirements and costs. Fussing at the inevitable won't help.
If 28 counties in Pennsylvania decide at the last minute that they don't want reformulated gasoline, so be it. The problem is the decision's timing, not its merit. There's no way for the industry to resist the decision without appearing hostile toward a sound if belated choice between marginal environmental benefits and excessive costs.
COSTS OF CAPRICE
At the same time, there's nothing wrong with pointing out how much government caprice costs. Indeed, it was government heedlessness of cost that fouled the Clean Air Act amendments and implementation of them.
For the oil industry, the good still outweighs the bad. Yes, the Clean Air Act amendments imposed needless requirements and costs. They also enabled competitors in a tough business to make technical advances that reduce environmental effects of petroleum use. In the long run, the exertions will help sell gasoline.
Copyright 1994 Oil & Gas Journal. All Rights Reserved.
Issue date: 12/12/94
